Goldman grows asset and wealth management revenue, but misses expectations

The addition of NN Investment Partners helped Goldman Sachs’ asset and wealth management business achieve significantly higher revenue in the first quarter compared to the year-ago period.

The group within Goldman reported $3.2 billion in quarterly revenue, a 24% increase over the first quarter of 2022, the company reported in its quarterly earnings Tuesday morning, driven by an increase in fees brought in from NNIP, the asset management arm of Dutch insurer NN Group that Goldman acquired in 2021.

Despite the year-over-year growth, revenue from in asset and wealth management fell short of analyst expectations of $3.8 billion, according to Bloomberg. The division lost $470 million because of the partial sale of its $4 billion Marcus loan book, which was housed under the asset and wealth management division.  

Goldman increased its assets under supervision by $125 billion during the quarter to a total of $2.67 trillion, a record high for the company. The firm also saw a 21% year-over-year increase in fees from alternative investments.

Overall, the investment bank’s traders failed to capitalize on the fixed-income bonanza the rest of Wall Street generated last quarter, contributing to firmwide revenue that fell short of analysts’ estimates and sending Goldman's shares down as much as 4%, Bloomberg reported.

Fixed-income trading revenue declined 17%, the firm said in a statement Tuesday. Goldman was the only major Wall Street bank so far to have posted a drop for that business, even though the performance was the firm’s third best in the past decade. Revenue from equities trading beat expectations, helping to soften the blow.

The firm’s profit was higher than analysts expected, but earnings were still down 19% from a year earlier.

Goldman said at its investor day in February that it’s considering strategic alternatives for what’s left of its consumer business, after mounting losses forced CEO David Solomon to backtrack on his goal of building out a giant business catering to the mass market.

Additional reporting provided by Bloomberg News.